EAP stands for Employee Assistance Program.

EAP's can cost little to no money to add to your benefits program.  Companies can buy EAP's on a stand-alone basis (meaning the EAP would not be tied to another plan) or they can add this to their long term disability program.  EAP's offer many services and can often fill in some coverage gaps in the medical plan.

Usually EAP's on a stand-alone basis are $2 to $6 per employee per month.  Price depends on the size of your employer group as well as the richness in benefits the company wishes to offer.  I have found the majority of the costs lie in the number of face-to-face counseling visits the EAP will pay for.  Most plans offer 3 face-to-face visits per occurrence per year.  An occurrence is usually loosely defined and can be pretty much anything.  Common occurrences include, but are not limited to: divorce, death, financial issues, marital issues, and drug abuse.

EAP's don't just offer counseling.  Most EAP's offer other services as well. General categories that EAP's target:

• Family, relationship and parenting issues
• Child and elder care needs
• Emotional and stress related issues
• Conflicts at home or work
• Alcohol and drug dependencies
• Health and wellness issues

Services generally offered to assist in these areas:

• Telephone consultation, available 24/7, with licensed mental health professionals
• Referrals to local child and/or elder care services and resources
• Online information and service
• Referrals to community resources when employees need additional assistance
• Legal and financial services
• Workplace support services

EAP's can help improve productivity, workplace safety, absenteeism, and reduce the number of health insurance claims.

A Consumer Driven Health Plan, or CDHP, is several things rolled into one term.  The term came about because these plans are meant to essentially give the control back to the consumer.  Whether they actually do this or not is another thing.  These plans also have one element in common; they all begin with a High Deductible Health Plan, or HDHP.  The other element they have in common is they have means of using savings dollars toward medical expenses.  The difference is that each has a different owner of the “savings" account.

The most popular CDHP is the Health Savings Account, or HSA.  In order to have a Health Savings Account, you must first buy a High Deductible Health Plan (HDHP).  What is a high deductible?  Well, these CDHPs are governed by the IRS (of course; because they offer tax savings) and the IRS defines a HDHP as having at least a $1,200 deductible for an individual and $2,400 deductible for a family. Once you have a HDHP, you may open a Health Savings Account (HSA).  A HSA works very much like any other savings account.  It is essentially a savings account with tax saving capabilities.  You may put up to $3050 per calendar year as a single person and up to $6,150 for a family (this is defined by having a main subscriber and a spouse or a main subscriber and a child/ren or a main subscriber and a spouse and child/ren). I usually refer people to www.hsabank.com.  This is a wonderful resource.   The money that a person puts into a HSA is tax deductible.  You can use the money in your HSA toward qualified medical expenses.  Qualified Medical Expenses are defined by the IRS.  You can get a list of these expenses by visiting www.hsabank.com or the IRS website (http://www.irs.gov/pub/irs-pdf/p502.pdf ).  The great thing about a HSA is it is owned by the individual.  If you change jobs, you take it with you!  You can also use this money for retirement.

There was another type of CDHP that was owned by the individual.  This is call a MSA or Medical Savings Account.  This plan has been replaced by HSAs.  Legislation was updated by the Bush Administration and improved to incentivize people to participate in a tax saving vehicle in relation to health care expenses.

The second type of CDHP is a HIA, or Health Incentive Account.  The difference between this and a HSA is that the savings account is held by the insurance carrier.  On the day you start coverage, you have access to a pre-designated amount per calendar year.  For example, let’s say you enroll on a $750 HIA and you start your coverage 2/1/10.  This plan also has a $1500 deductible (as it must have a HDHP in order to be a Consumer Driven Product).  You start out with $750 first dollar coverage.  The insurance company is giving you this money and it is included in your monthly premium.  Once you use all of the $750, you have to meet the remainder of the $1500 deductible, which is $750, before the insurance will begin paying on your claims again.  Once that deductible is met, the insurance will start paying for services again on a coinsurance level/percentage basis (most of these plans pay out 80%).  So, why are these plans cheaper than a traditional PPO?  Because insurance actuaries have determined that people pay more attention to their benefit dollars when they are given a designated amount of first dollar coverage.  When insureds are looking at their Explanation of Benefits (item you receive in the mail from your insurance company once a claim is processed) it is more likely that people will:

1. Shop around for services (hints why the word “consumer” is used in Consumer Driven Health Care) and find the best “deal.”
2. Catch insurance fraud.
3. Budget their insurance dollars.

The third type of CDHC can be administered thru a HRA, or Health Reimbursement Account.  HRAs are owned by the employer.  This doesn’t mean that employers cannot use the other two types of CDHCs.  The point is that the account is owned by the employer and NOT the individual or employee(s) and the account is NOT owned by your insurance company.  HRAs give the control to the employer.  It is the employer’s money; they can design a plan that works for their company and their employees.  In short, the employer purchases a HDHP for all of their employees, and then the employer chooses how they would like to fund that deductible.  If you want a $100 deductible with 100% coverage, you can do that.  If you want a $0 deductible with 50% coverage you can do that as well.  It is completely up to the employer on how they want to design the coverage. The money that is distributed from a HRA is tax deductible to the employer.  The reason why HRAs work is there is usually about a 20%+ savings in premium between a traditional plan and a HDHP.  With that savings, the employer can then use that money to fund the deductible for its employees.  If the employees do not use the plan, the employer keeps the money.  The risk is minimal in comparison to a fully self-funded plan.  These HRAs are also referred to as a Partially Self-Funded Plan.  This is because the employer is only funding the deductible of $1500 to $5000 usually and with a Self-Funded plan, the deductible will be between $30,000 (with plans like Great West) to $100K+.  HRAs are a great solution for employers who are smaller in size and need smaller amount of risk than a self-funded plan.

Consumer Driven Health Plans are not for everyone.  However, when it is appropriate it can be a wonderful solution to rising health care costs.

We here at Beneflex Insurance Services are proud to announce that our group, the United Benefits Advisors, remains among the top-3 (by revenue) benefits advisory organizations in the entire United States. This is a distinction that we have been proud to claim over the past several years. We feel strongly that this success is due to the unparalleled service and expertise that we are able to provide our clients.

We sincerely wish to thank our clients for their continued belief in our efforts; here’s to ongoing success in 2012!

In times like these... Being in compliance can save your company thousands.

It is important to find an advisor or broker that has an in-house Compliance Officer.  There are too many unknowns in regards to Health Care Reform.  Companies must have up to the minute information in order to prepare and keep their employee benefit plans in compliance.

Our Beneflex in-house Compliance Officer, Mike Cramer, tracks federal, state and local laws and regulations as well as pending legislation that might affect each client's health and welfare plans.  He designs and implements programs, policies, and practices to ensure that all clients' plans are in full compliance.  He prepares easy to understand summary text of new and pending laws and regulations which are communicated to you via seminars, webinars, BenAlerts, and e-mail updates.  Beneflex will perform and keep you up to date on the following: 

• Federal abd State legislation and mandates
• Insurance carrier mandates
• Review all carrier contracts and policy changes for accuracy
• Prepare IRS Form 5500 for health and welfare plans
• Perpare Medicare Part D Notices
• Health Care Reform
• Department of Labor
• CMS requirements
• Business Associate Agreements
• Client Seminars, webinars, BenAlerts, and e-mail updates
• Meet with clients as needed
  
  
  

Self-Funding is a huge opportunity right now for groups with 51 employees or more.  If you haven't look at it you need to.  Stop Loss carriers are competing with one another for business, so rates are low relative to fully insured plans.

I believe the HRA's/Partially Self-Funded Plan and Self-Funded plans are the way of the future.

Stop Loss carriers and TPA (Third Party Administrators) are allowing groups to self-fund all the way down to 51 employees!  These are the lowest numbers we have ever seen.  In the past, smaller employers were not allowed to self-fund.  There was a "glass ceiling" where insurance companies would require 250, 500, or sometimes 1000+ employees in order to self-fund.  Now, smaller employers have the opportunity to see if there is any savings for them in the self-funded arena.

I don't use this blog as a “sales pitch” at all.  This is my personal blog and my company does not reimburse me for my operation costs of this site.  I do this because I love it and I want to educate people.

If your current advisor is not an absolute expert on self-funding, find one that is.

Here are some case studies:

Client 1: 356 employees; renewal was reduced from 32% to 3%

Client 2: 185 employees; renewal was reduced from 40% to 5%

Client 3: 940 employees; renewal was reduced from 26% to -11%

Client 4: 94 employees; renewal was reduced from 14% to -11%